What is the difference between buying/financing versus leasing?
When you buy a car, you pay for the whole car (sooner or later) plus tax and license on the whole price. Plus, you pay interest on the whole loan. When you lease a car, you agree to pay ONLY THE VALUE THE CAR IS PROJECTED TO LOSE WHILE YOU HAVE IT, plus tax ONLY on what you pay, and license. And, of course, you pay interest on what you borrow. 2.) Why is a lease payment generally lower than a loan payment on a purchase? When you lease a car, your principal payment represents only the depreciation while you have it. The “end value” of your lease is actually a GUARANTEED buyback value, which is often higher than the car will be worth when you’re finished with it. So, you only pay the difference between the beginning value and the guaranteed end value, not for the whole car. It’s a simple, “pay as you go” arrangement. On the contrary, if you purchase and finance your new car instead of leasing it, you essentially make it into a savings account, in which you attempt to pay it down faster t
